Facts:
- AUDJPY rebounded from the lower boundary of the current upward channel, moving above the 30-day exponential moving average.
- Employment in Australia rose in line with expectations (+24.5k new jobs) after a weaker-than-forecast reading in July.
Recommendation:
- Long position (BUY) on AUDJPY at market price.
- Target price (Take Profit; TP): 97.200 (TP1), 98.200 (TP2)
- Stop Loss (SL): 94.900
Source: xStation5
Opinion
The exceptionally weak July labour market report from Australia (+1k jobs vs. 21k forecast) sparked debate in the market about accelerating the pace of interest rate cuts, especially in light of the Reserve Bank of Australia’s downgraded growth outlook for 2025 (1.7% vs. 2.1% previously). AUDJPY was also pressured by the Bank of Japan’s upward revisions to inflation forecasts for 2025–2026, which support the case for a hawkish shift by the BoJ should current price dynamics get out of control.
Despite these macroeconomic signals, the exchange rate has recovered most of the losses from August 1, maintaining the ongoing upward trend. The recent correction halted at the lower boundary of the rising channel, while the employment rebound last month (+24.5k) significantly cooled dovish expectations for Australian monetary policy, which is now seen as set for only gradual easing (currently futures are pricing in just one more rate cut through the end of 2025).
Solid labor market data, combined with the current technical setup, should therefore support further appreciation of AUD against JPY, especially in the context of renewed risk appetite (Ukraine negotiations, U.S.–China trade truce).
Methodology
The recommendation was prepared on the basis of fundamental analysis of monetary policy in the respective economies, and technical analysis of the AUDJPY futures chart. The recommendation direction was determined using exponential moving averages (EMA30 above EMA100; price crossing the shorter EMA) and expectations regarding central bank policy (moderate pace of cuts in Australia). Take Profit and Stop Loss levels were determined based on price action. Stop Loss was set at the level of the last low, below EMA100, which should act as key support in case of a potential trend reversal.
